The Short History of the Future of Manufacturing

Advances in 3D printing, new human-robot interactions, extreme customization and shale energy are just some of the elements that will shape the future of manufacturing. As Yogi Berra said, “the future is no longer what it used to be”. But he also said that sometimes it is just “deja vu all over again”.

The future of manufacturing, like its past, involves astonishing changes. After all, etymologically, the term literally means handmade or handicraft. The word stuck, even though production processes changed to mean almost its opposite. These changes, while unpredictable in their detail, seem to follow certain broad directions.

What impressed Adam Smith back in 1776 was the fact that manufactures could constantly reorganize labor, dividing tasks between people into narrower chunks that could then be either better mastered by the worker or more easily substituted by a machine. A Boeing 747 has over 6 million different parts. With the division of labor we can use much more knowledge than can be mastered by any individual. Through this process productivity increases, allowing us to do more with less.

At a more abstract level, what has been happening is simply a consequence of the laws of thermodynamics. We want to create products that satisfy our needs because nature does not provide them in the shape, quantities and locations we want them in. So we have to reorder the world. But order is not what the world tends to move into on its own—quite the contrary. So to create order, we need information about what that order is supposed to look like and knowledge about how to get there. But to create order you need to do work, you need to use energy. That is why so much of the technological revolutions of times past have been related to mastering energy: from waterpower, to the coal-powered steam engine, the electric motor and the gasoline-powered internal combustion engine. But knowledge about how to reorder matter—from chemistry, biology and solid-state physics—and about encoding and manipulating information allows us to use even less matter and energy in achieving our goals. In going from the wax candle in 1800 to the fluorescent light bulb of 1992, the number of lumen-hours per unit of work increased by a factor of more than 44,000. The Apple II Plus with 48k of RAM cost more than a Mac Pro today even though it had 125,000 times less RAM memory and ran at a frequency over 300 times slower.

More and more information is getting packed into less matter. As a consequence, more of the work goes into manipulating information rather than matter. Jobs move from the shop floor to the design floor. A Boeing 747 or an iPhone are made mostly out of fairly common materials that are worth at most just a few dollars a pound. However, they both go for over $1,000 per pound. The bulk of the value is in the information content, not the raw materials. And that is where the jobs and the livelihoods are going.

As this happens, the nature of work changes causing job losses for some while opportunities open up for others. The future is always some combination between the promise of new possibilities and the threat to existing ones. Again this is not new. Back in 1811, skilled craftsmen—the so-called Luddites—attacked the new automated power looms designed to cost-effectively replace their handlooms and their jobs. Today, similar fears about outsourcing generate much anxiety in advanced countries. A Google search finds the phrase “jobs that cannot be outsourced” in over 470,000 different documents. In fact, in his 2013 State of the Union Address, President Obama presented a manufacturing plan to “bring jobs back” to the U.S., a phrase that suggests a return to a better past.

The truth is that new jobs are not “coming back” but forward. The world is changing as technology advances and diffuses throughout the globe. This is also not new. But for the first time since the Industrial Revolution, the last decade has seen growth in the so-called advanced countries account for less than 50 percent of world growth, down from over 80 percent in the 1970s and 1980s. They will be down to less than 30 percent through 2014. The rest of the world is simply catching up faster than before. This can be made into good news. First, the income per capita of the new fast growers is on average less than 20 percent of that of the advanced countries. So the world is becoming less unequal. More importantly, the fast growers will need more machines, materials and knowhow and these have to come from somewhere.

The opportunity for advanced countries lies in building advanced tools needed to make more tools, and supplying the programming, finance, logistics and marketing required to intelligently manipulate matter. In this way, manufacturing will continue to pack more information and knowledge into less matter using less energy, making the world to order.

Jobs are constantly shifting and not always out of manufacturing. It used to be that farmers made their own fertilizer with dung and plowed land with their own animals. Today, fertilizers, tractors and fuel are made with manufacturing jobs that have displaced agricultural work. Even service jobs have moved into manufacturing. Penicillin destroyed thousands of jobs in Alpine sanatoria, to the delight of the sick. Accountants used to work with paper and pencil. And only yesterday, airline staff printed boarding passes at airport counters. Machines are eliminating these jobs. And these machines have to be made and programed by people too.

So I guess it is deja vu all over again, after all. Just as before, manufacturing will make more with less. It will pack more information and knowledge into less matter using less energy while making more effective products. Jobs will keep moving from manipulating matter to playing with information and ideas, as tasks will keep moving towards design, programming, finance, logistics, marketing, commerce and repairs and into making sure that this much deeper division of labor and tasks works smoothly. And as always, the future of manufacturing will just get better.

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